They probably get to write off the whole sticker price from their taxable earnings. I work in a factory that makes complex doodads. These things could go through a dozen individual operations on various different machines before being complete. Hours of machine and labor time per part by the time it goes through the full production process. Say something sells at $100 per piece and the client orders 10,000 of them. If one of them gets scrapped, even on the very first operation, it gets written off for the full price, despite (usually) only costing a pittance in raw materials. If 5% get scrapped, that's a $50,000 write-off.
They probably get to write off the whole sticker price from their taxable earnings. I work in a factory that makes complex doodads. These things could go through a dozen individual operations on various different machines before being complete. Hours of machine and labor time per part by the time it goes through the full production process. Say something sells at $100 per piece and the client orders 10,000 of them. If one of them gets scrapped, even on the very first operation, it gets written off for the full price, despite (usually) only costing a pittance in raw materials. If 5% get scrapped, that's a $50,000 write-off.
Lost potential future earnings